On February 11, 2025 Exelixis, Inc. (Nasdaq: EXEL) reported financial results for the fourth quarter and fiscal year of 2024, provided an update on progress toward achieving key corporate objectives, and outlined its commercial, clinical and pipeline development milestones (Press release, Exelixis, FEB 11, 2025, View Source [SID1234650169]).
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"Exelixis delivered a strong fourth quarter of 2024, positioning us well to maximize success in 2025," said Michael M. Morrissey, Ph.D., President and Chief Executive Officer, Exelixis. "Due to the continued outsized performance of the cabozantinib franchise, we generated net product revenues of $515 million and $1.81 billion in the fourth quarter and full year 2024, respectively. Our current 2025 guidance, which does not include any impact from a potential U.S. regulatory approval for CABOMETYX in advanced neuroendocrine tumors, points to solid growth for the cabozantinib franchise. We’re launch-ready for this important indication ahead of an April 3, 2025 PDUFA target action date for our U.S. regulatory filing."
Dr. Morrissey continued: "We expect zanzalintinib to take center stage in 2025 as our next franchise opportunity that could improve standards of care for patients with cancer. Our anticipated zanzalintinib pivotal data milestones include top-line results from STELLAR-303 in colorectal cancer and STELLAR-304 in non-clear cell renal cell carcinoma, and a decision to advance to the phase 3 portion of STELLAR-305 in head and neck cancer, all in the second half of the year pending event rates for each trial. We are also excited to deliver on our plan to initiate the STELLAR-311 trial of zanzalintinib in neuroendocrine tumors in the first half of 2025 and anticipate Merck to initiate two renal cell carcinoma studies evaluating zanzalintinib plus belzutifan this year. With so much in store for 2025, the entire Exelixis team has a singular focus on achieving our mission to help cancer patients recover stronger and live longer."
Fourth Quarter and Fiscal Year 2024 Financial Results
Total revenues for the quarter and year ended December 31, 2024 were $566.8 million and $2,168.7 million, as compared to $479.7 million and $1,830.2 million for the comparable periods in 2023.
Total revenues for the quarter and year ended December 31, 2024 included net product revenues of $515.2 million and $1,809.4 million, respectively, as compared to $429.3 million and $1,628.9 million for the comparable periods in 2023. The increases in net product revenues, for both periods, were primarily due to an increase in sales volume and an increase in average net selling price.
Collaboration revenues, composed of license revenues and collaboration services revenues, were $51.5 million for the quarter ended December 31, 2024, as compared to $50.3 million for the comparable period in 2023. The increase in collaboration revenues was primarily related to royalty revenues for the sales of cabozantinib outside of the U.S. generated by Exelixis’ collaboration partners, Ipsen Pharma SAS and Takeda Pharmaceutical Company Limited, partially offset by a decrease in development cost reimbursements earned. Collaboration revenues were $359.3 million for the year ended December 31, 2024, as compared to $201.3 million for the comparable period in 2023. The increase was primarily related to the recognition of milestone-related revenues and higher royalty revenues for the sales of cabozantinib outside of the U.S. generated by Exelixis’ collaboration partners, partially offset by a decrease in development cost reimbursements earned.
Research and development expenses for the quarter ended December 31, 2024 were $249.0 million, as compared to $244.7 million for the comparable period in 2023. The increase in research and development expenses for the quarter was primarily related to increases in license and other collaboration costs, personnel expenses and higher manufacturing costs to support Exelixis’ development candidates, partially offset by decreases in clinical trial costs, and consulting and outside services. Research and development expenses for the year ended December 31, 2024 were $910.4 million, as compared to $1,044.1 million for the comparable period in 2023. The decrease in research and development expenses for the year was primarily related to decreases in license and other collaboration costs, personnel expenses, consulting and outside services, and laboratory supplies, partially offset by higher manufacturing costs to support Exelixis’ development candidates and clinical trial costs.
Selling, general and administrative expenses for the quarter ended December 31, 2024 were $134.3 million, as compared to $131.4 million for the comparable period in 2023. The increase in selling, general and administrative expenses for the quarter was primarily related to increases in personnel expenses and stock-based compensation expenses, partially offset by decreases in corporate giving and legal and advisory fees. Selling, general and administrative expenses for the year ended December 31, 2024 were $492.1 million, as compared to $542.7 million for the comparable period in 2023. The decrease in selling, general and administrative expenses for the year was primarily related to decreases in corporate giving, legal and advisory fees, technology costs, and stock-based compensation expenses, partially offset by an increase in personnel expenses.
Provision for income taxes for the quarter and year ended December 31, 2024 was $44.9 million and $160.4 million, respectively, as compared to $17.5 million and $49.8 million for the comparable periods in 2023, primarily due to an increase in pre-tax income.
GAAP net income for the quarter ended December 31, 2024 was $139.9 million, or $0.49 per share, basic and $0.48 per share, diluted, as compared to GAAP net income of $85.5 million, or $0.28 per share, basic and $0.27 per share, diluted, for the comparable period in 2023. GAAP net income for the year ended December 31, 2024 was $521.3 million, or $1.80 per share, basic and $1.76 per share diluted, as compared to GAAP net income of $207.8 million, or $0.65 per share, basic and diluted, for the comparable period in 2023.
Non-GAAP net income for the quarter ended December 31, 2024 was $160.3 million, or $0.56 per share, basic and $0.55 per share, diluted, as compared to non-GAAP net income of $104.2 million, or $0.34 per share, basic and $0.33 per share diluted, for the comparable period in 2023. Non-GAAP net income for the year ended December 31, 2024 was $593.6 million, or $2.05 per share, basic and $2.00 per share, diluted, as compared to non-GAAP net income of $289.4 million or $0.91 per share, basic and $0.90 per share, diluted, for the comparable period in 2023.
Non-GAAP Financial Measures
To supplement Exelixis’ financial results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), Exelixis presents non-GAAP net income (and the related per share measures), which excludes from GAAP net income (and the related per share measures) stock-based compensation expense, adjusted for the related income tax effect for all periods presented.
Exelixis believes that the presentation of these non-GAAP financial measures provides useful supplementary information to, and facilitates additional analysis by, investors. In particular, Exelixis believes that these non-GAAP financial measures, when considered together with its financial information prepared in accordance with GAAP, can enhance investors’ and analysts’ ability to meaningfully compare Exelixis’ results from period to period, and to identify operating trends in Exelixis’ business. Exelixis has excluded stock-based compensation expense, adjusted for the related income tax effect, because it is a non-cash item that may vary significantly from period to period as a result of changes not directly or immediately related to the operational performance for the periods presented. Exelixis also regularly uses these non-GAAP financial measures internally to understand, manage and evaluate its business and to make operating decisions.
These non-GAAP financial measures are in addition to, not a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Exelixis encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP financial information and the reconciliation between these presentations, to more fully understand Exelixis’ business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.
2025 Financial Guidance
Exelixis is maintaining the previously provided financial guidance for fiscal year 2025. Net product and total revenues guidance do not currently reflect any revenues resulting from a potential U.S. regulatory approval and commercial launch of CABOMETYX (cabozantinib) for the treatment of patients with previously treated advanced neuroendocrine tumors (NET). The U.S. Food and Drug Administration (FDA) is currently reviewing Exelixis’ supplemental New Drug Application (sNDA) for this proposed indication, with a Prescription Drug User Fee Act (PDUFA) target action date of April 3, 2025.
Total revenues
$2.15 billion – $2.25 billion
Net product revenues
$1.95 billion – $2.05 billion(1)
Cost of goods sold
4% – 5% of net product revenues
Research and development expenses
$925 million – $975 million(2)
Selling, general and administrative expenses
$475 million – $525 million(3)
Effective tax rate
21% – 23%
____________________
(1)
Exelixis’ 2025 net product revenues guidance range includes the impact of a U.S. wholesale acquisition cost increase of 2.8% for CABOMETYX effective Jan. 1, 2025.
(2)
Includes $40.0 million of non-cash stock-based compensation expense.
(3)
Includes $60.0 million of non-cash stock-based compensation expense.
Cabozantinib Highlights
Cabozantinib Franchise Net Product Revenues and Royalties. Net product revenues generated by the cabozantinib franchise in the U.S. were $515.2 million during the fourth quarter of 2024, with net product revenues of $512.8 million from CABOMETYX and $2.4 million from COMETRIQ (cabozantinib). For the year ended December 31, 2024, net product revenues generated by the cabozantinib franchise in the U.S. were $1,809.4 million, with net product revenues of $1,798.2 million from CABOMETYX and $11.2 million from COMETRIQ. In 2024, global cabozantinib franchise net product revenues generated by Exelixis and its partners exceeded $2.5 billion. Based upon cabozantinib-related net product revenues generated by Exelixis’ collaboration partners during the quarter and year ended December 31, 2024, Exelixis earned $44.4 million and $166.9 million, respectively, in royalty revenues.
Detailed Results from Subgroup Analysis of Phase 3 CABINET Pivotal Study Evaluating Cabozantinib in Advanced Gastrointestinal (GI) NET Presented at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Gastrointestinal Cancers Symposium (ASCO GI 2025). In January 2025, results from a subgroup analysis of the CABINET study of patients with extra-pancreatic neuroendocrine tumors (epNET) arising in the GI tract were featured in a poster session at ASCO (Free ASCO Whitepaper) GI 2025. The analysis showed cabozantinib was associated with an improvement in progression-free survival (PFS) compared with placebo in patients with advanced GI NET, which was a subgroup of the epNET cohort. Earlier in January, the National Comprehensive Cancer Network (NCCN) Clinical Practice Guidelines in Oncology for Neuroendocrine and Adrenal Tumors were updated to include cabozantinib as category 1 for certain types of NET following specific treatments, and as a category 2A preferred regimen for several other forms of advanced NET, depending on site of origin and grade.
Cabozantinib Data Presentations at the American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) 2025 Genitourinary Cancers Symposium (ASCO GU). In February 2025, cabozantinib will be the subject of 16 presentations and poster sessions at this year’s ASCO (Free ASCO Whitepaper) GU, which is being held from February 13-15 in San Francisco. Notable presentations will include final follow-up results from the CheckMate -9ER trial (median follow-up of 67.6 months).
Pipeline Highlights
Encouraging Results from Phase 1b/2 STELLAR-001 Trial Evaluating Zanzalintinib Alone or in Combination with Atezolizumab (Tecentriq) in Metastatic Colorectal Cancer (CRC) Presented at ASCO (Free ASCO Whitepaper) GI 2025. In January 2025, results from an expansion cohort of the phase 1b/2 STELLAR-001 trial evaluating zanzalintinib alone or in combination with atezolizumab in patients with previously treated metastatic CRC were presented during a poster session at ASCO (Free ASCO Whitepaper) GI 2025. This cohort of the STELLAR-001 trial included 107 patients randomized 1:1 to receive single-agent zanzalintinib or zanzalintinib in combination with atezolizumab. Patients had unresectable, locally advanced or metastatic RAS wild-type CRC that is non-microsatellite instability-high or non-mismatch repair-deficient. Results from the presentation demonstrated that all efficacy parameters, including objective response rate, PFS and overall survival (OS) favored the combination of zanzalintinib plus atezolizumab versus zanzalintinib monotherapy in the overall population, as well as in a subgroup of patients without liver metastases. These data provide insights into the contribution of components for the zanzalintinib plus atezolizumab combination and support zanzalintinib’s ongoing pivotal development in metastatic CRC. Exelixis anticipates disclosing additional data from zanzalintinib’s phase 1b/2 studies in the first half of 2025.
Initiation of Phase 1 Clinical Trial Evaluating XL495 in Patients with Advanced Solid Tumors. In November 2024, Exelixis announced the initiation of the dose-escalation stage of the first-in-human phase 1 clinical trial of XL495 in patients with advanced solid tumors. XL495 is a novel, potent, small molecule inhibitor of PKMYT1. The dose-escalation stage of this phase 1 study is designed to determine the maximum tolerated dose of XL495. The expansion cohorts are designed to further assess the tolerability and activity of XL495 both as monotherapy and in combination with select cytotoxic agents in tumor-specific indications. Exelixis plans to present data from the XL495 program, as well as XL309 (potentially best-in-class small molecule inhibitor of USP1) and XB010 (5T4-targeting antibody-drug conjugate), at a scientific meeting in 2025.
Corporate Highlights
Clinical Development Collaboration with Merck to Evaluate Zanzalintinib in Combination with KEYTRUDA (pembrolizumab) in Head and Neck Cancer and with WELIREG (belzutifan) in Renal Cell Carcinoma (RCC). In October 2024, Exelixis and Merck (known as MSD outside of the U.S. and Canada) announced a clinical development collaboration to evaluate zanzalintinib in combination with KEYTRUDA in head and neck squamous cell carcinoma (HNSCC), and zanzalintinib with WELIREG in RCC. Under the terms of the collaboration, Merck will supply KEYTRUDA, its anti-PD-1 therapy, for the ongoing, Exelixis-sponsored phase 3 STELLAR-305 pivotal trial in previously untreated PD-L1 positive recurrent or metastatic HNSCC. In addition, Merck will sponsor a phase 1/2 trial and two phase 3 pivotal trials evaluating zanzalintinib in combination with WELIREG, its oral hypoxia-inducible factor-2 alpha (HIF-2α) inhibitor, in RCC. Merck will fund one of these phase 3 studies, and Exelixis will co-fund the phase 1/2 trial and the other phase 3 study, as well as supply zanzalintinib and cabozantinib. Exelixis maintains all global commercial and marketing rights to zanzalintinib.
Favorable Ruling in Second Cabozantinib Abbreviated New Drug Application (ANDA) Litigation Against MSN Pharmaceuticals, Inc. (MSN). In October 2024, the U.S. District Court for the District of Delaware (the District Court) ruled in Exelixis’ favor, rejecting MSN’s challenge to three Orange Book-listed patents related to cabozantinib (U.S. Patents No. 11,091,439 (crystalline salt forms), 11,091,440 (pharmaceutical composition) and 11,098,015 (methods of treatment)), which expire January 15, 2030. The District Court’s decision follows an earlier stipulation that MSN’s proposed generic cabozantinib product (ANDA No. 213878) infringes the ’439, ’440, and ’015 patents. The District Court also ruled that Exelixis’ U.S. Patent No. 11,298,349 (pharmaceutical composition) is not invalid and not infringed by MSN’s proposed ANDA product. To Exelixis’ knowledge, the FDA has not yet granted tentative approval of MSN’s proposed ANDA product. On October 23, 2024, the District Court entered final judgment reflecting the opinion. Based on the District Court’s final judgment should the FDA ultimately approve MSN’s ANDA, the effective date of any such approval and commercial launch in the U.S. of MSN’s proposed ANDA product shall not be a date earlier than January 15, 2030, subject to Exelixis’ potential additional regulatory exclusivity. On November 22, 2024, MSN noticed an appeal to the Court of Appeals for the Federal Circuit and Exelixis noticed a cross-appeal on November 26, 2024. In February 2025, Exelixis received notice that MSN submitted to the FDA a Paragraph IV certification regarding another Exelixis Orange Book patent: U.S. Patent No. 12,128,039 (low impurity), which expires in 2032. Exelixis is evaluating next steps and will continue to vigorously defend its cabozantinib intellectual property estate.
Stock Repurchase Program. Under the ongoing 2024-25 $500 million stock repurchase program announced in August 2024, Exelixis has repurchased $205.6 million of the company’s common stock, at an average price of $33.62 per share as of the end of fiscal year 2024. This is the third stock repurchase program undertaken by Exelixis since March 2023. Stock repurchases under this program may be made from time to time through a variety of methods, which may include open market purchases, in block trades, accelerated stock repurchase transactions, exchange transactions, or any combination of such methods. The timing and amount of any stock repurchases under the stock repurchase program will be based on a variety of factors, including ongoing assessments of the capital needs of the business, alternative investment opportunities, the market price of Exelixis’ common stock and general market conditions.
Announcement of Key Priorities and Anticipated Milestones for 2025. In January 2025, Exelixis announced its key priorities and anticipated milestones for 2025, including: the potential commercial launch of CABOMETYX for the treatment of patients with previously treated advanced NET following completion of the FDA’s review of Exelixis’ sNDA, which has a PDUFA action date of April 3, 2025; expansion of zanzalintinib’s pivotal development program with six ongoing or planned pivotal trials, including two pivotal RCC studies with Merck and additional studies to be announced in 2025, as well as initial clinical data readouts from the phase 1b/2 STELLAR-001 and STELLAR-002 clinical studies in the first half of the year and clinical updates from the pivotal STELLAR-303, -304 and -305 trials in the second half of 2025; accelerating the phase 1 development of XL309 as a potential therapy for tumors that have become refractory to PARP inhibitor (PARPi) therapy, as well as in combination with PARPi agents to deepen and prolong responses; continued progress of phase 1 clinical trials for XB010 and XL495; potentially filing three Investigational New Drug applications for the XB628 PD-L1-NKG2A bispecific antibody, XB064 ILT-2 monoclonal antibody and XB371 TF-topoisomerase I inhibitor antibody-drug conjugate. Exelixis presented the details of its key priorities and anticipated milestones at the 43rd Annual J.P. Morgan Healthcare Conference.
Basis of Presentation
Exelixis has adopted a 52- or 53-week fiscal year that generally ends on the Friday closest to December 31. For convenience, references in this press release as of and for the fiscal periods ended January 3, 2025 and December 29, 2023, are indicated as being as of and for the periods ended December 31, 2024 and 2023, respectively.
Conference Call and Webcast
Exelixis management will discuss the company’s financial results for the fourth quarter and fiscal year 2024 and provide a general business update during a conference call beginning at 5:00 p.m. ET / 2:00 p.m. PT today, Tuesday, February 11, 2025.
To access the conference call, please register using this link. Upon registration, a dial-in number and unique PIN will be provided to join the call. To access the live webcast link, log onto www.exelixis.com and proceed to the Event Calendar page under the Investors & News heading. A webcast replay of the conference call will also be archived on www.exelixis.com for one year.